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CBO to Rule Health Premiums Must Be Included in Budget

By David S. Broder and Dana Priest
The Washington Post

Apprehensive White House officials said Monday night they expect the Congressional Budget Office to rule Tuesday that billions of dollars in required insurance premiums in President Clinton's health care plan must be included in the federal budget.

The decision would not change the Clinton health plan but it is a public relations blow the White House desperately sought to avoid.

"The Republicans will jump all over this and say we're increasing the budget by 25 percent and putting through the biggest tax increase in history," a senior administration official said.

Separately, the CBO, which is the agency that Congress uses to measure the budget impact of bills, also will rule Tuesday on whether the Clinton financing plan adequately covers the cost of universal health care. White House and key Democratic members of Congress predicted that CBO will cautiously endorse the administration assertion that premiums, higher cigarette taxes and savings in other health programs will be enough to cover the cost and leave a small amount for deficit reduction.

Others outside the administration said CBO was going to challenge the cost estimates, which would be a further blow to prospects for the Clinton plan.

Although the CBO is a congressional agency, so far its estimates and rulings have been accepted by the Clinton administration as gospel. Because of its status, administration officials worked frantically to convince the CBO to keep the health plan off-budget. Until recently, they thought they had prevailed.

Indeed, in early December The Washington Post quoted congressional sources as saying that CBO had agreed to keep the bulk of the spending included in the president's plan off the federal budget.

CBO Director Robert D. Reischauer declined to comment.

If the advance reports on the testimony Reischauer will give Tuesday afternoon to the House Ways and Means Committee are correct, CBO will not use the word "taxes" to describe the payments all employers would be required to make to cover 80 percent of the cost of their employees' health coverage.

Rather, they would be classified as one of the "miscellaneous or offsetting receipts," akin to grazing and mining fees and other payments the government receives from people who derive specific benefits in return for these assessments. Medicare Part B payments also go into this category. It was not immediately clear under the CBO plan whether the accounts would be displayed as part of the traditional unified budget or separately in a special budget category or appendix.